Byrna Technologies Inc. Q4 FY2024 earnings call

• Advertising strategy shift starting September 2023 led to revenue growth, with direct-to-consumer sales increasing through byrna.com and amazon.com.
• Hit 500,000 launchers sold milestone.
• Celebrity endorsement program: terminated some endorsers not meeting ROAS, onboarded new partners like Megyn Kelly, Charlie Kirk, Lara Trump.
• Expanded advertising to traditional media like cable.
• Opened new retail stores with firing ranges, e.g., Nashville store; plan to open 11 stores in Sportsman's Warehouse by Q2, 50 more by 2025, 100 by 2026.
• Onshored ammo production in Fort Wayne, Indiana; dual-sourced magazine components to mitigate tariffs.
• Sold stake in Byrna Technologies Inc. LatAm, continuing partnerships there.
• Increased production to 24,000 launchers per month, opened ammo facility; compact launcher expected to boost sales and margins.

For the fiscal fourth quarter ended November 30, 2024, net revenue was $28 million, a 79% increase from $15.6 million in Q4 2023. The full year 2024 net revenue totaled $85.8 million, up 101% from $42.6 million in 2023. Gross profit for Q4 2024 was $17.6 million (62.8% of net revenue) compared to $9 million (57.8% of net revenue) in Q4 2023. Full year 2024 gross profit was $52.8 million (61.5% of net revenue) vs $23.6 million (55.5% of net revenue) in 2023. Operating expenses in Q4 2024 were $13.5 million vs $9.7 million in Q4 2023; full year 2024 operating expenses were $46.1 million vs $31.4 million in 2023. Net income for Q4 2024 was $9.7 million vs a net loss of $0.8 million in Q4 2023. Full year 2024 net income was $12.8 million vs a net loss of $8.2 million in 2023. Adjusted EBITDA for Q4 2024 was $5.2 million vs $400,000 in Q4 2023; full year 2024 adjusted EBITDA was $11.5 million vs negative $2 million in 2023.

• Q1 2025 expected to be a record quarter but slower than Q4 2024.
• Anticipate double-digit revenue growth in 2025.
• Expect margins to continue improving, especially with compact launcher and economies of scale.
• Sportsman's Warehouse partnership rollout starting Q2, with 11 initial stores, 50 more by 2025, and 100 total by 2026.

• Tariffs on Chinese, Canadian, Mexican goods: limited impact due to diversified supply chain, but potential retaliatory tariffs could affect Mexico and Canada sales.
• Initial store rollout may have negative impact on operating expenses as new stores are loss leaders.

Q: Curious if you could speak to any demand and sales trends in the first quarter to date, any notable changes since the administration took office, and context around the loss of Huckabee.

A: Q1 is traditionally slower but will be a record quarter. No significant change in demand due to election. Loss of Huckabee had minimal impact as he was a small endorser.

Q: Just to follow-up on the Sportsman's Warehouse, have you thought about sort of a time frame when you can declare success hitting the targets there?

A: We know from our own stores it takes 4-6 months to hit stride. Sportsman's Warehouse may happen more quickly due to existing traffic but won't be overnight.

Q: Back to the build-out there. It's I think you said that each of your, like, like, the Nashville store, etcetera. That's a four hundred, five hundred thousand dollar expense. What do you anticipate for the expense for the sportsman store within a store?

A: Our build-out of our stores are in the 200-250k range. For sportsmen, they're reconfiguring space, estimating build-out to be about $15k per store, of which we'll pay half, so $7.5k per store.